Stochastic differential equation

A stochastic differential equation (SDE) is like a regular equation you might see in math class, only it includes some randomness, like the roll of a dice or the flip of a coin. In math terms, this randomness is usually described with a variable called a "noise variable". The noise variable adds a little bit of uncertainty to the equation, which means we don't know what the exact outcome will be. This makes it difficult to solve the equation, but there are still some ways to figure out the answers. One way is to use special mathematical techniques called computer simulations. This involves running the equation multiple times with different noise variables, and then comparing the different outcomes to get an approximate understanding of what will happen.